What is Medigap?
Medicare Supplement Insurance Plans (Medigap) coverage refers to plans that help to fill any gaps in Original Medicare (Medicare Part A and Medicare Part B) coverage. Medigap plans are purchased in addition to Original Medicare, not to replace Original Medicare. Medigap does not work with Medicare Advantage (Medicare Part C). Medigap pays part or all certain remaining costs after Original Medicare pays first. The Medigap policy covers coinsurance after the individual pays the deductible. Some Medigap policies pay the deductible.
Every Medigap policy must follow federal and state laws designed to protect the consumer. Medigap policies are required to be identified as “Medicare Supplemental Insurance”. All policies offer the same basic benefits, but some offer additional benefits. In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized differently
How does Medigap work?
Private companies sell Medigap to fill in coverage gaps in Original Medicare. Medicare Part B pays around 80% for some covered services. The individual is responsible for the remaining 20%. A Medigap plan can pay the remaining 20%. Medicare Part A has a large per-event deductible and full coverage lasts only 60 days. A Medigap plan can pay the deductibles and coinsurance so an inpatient stay will cost little to nothing out-of-pocket. Medigap policies may cover health care costs that Medicare does not like care received when traveling.
Who is eligible for Medigap coverage?
An individual must be enrolled in Original Medicare (Medicare Part A and Medicare Part B) to be eligible for a Medigap policy. Individuals with a Medicare Advantage Plan (Medicare Part C) are not eligible for a Medigap policy.
Who is eligible for Medicare?
Medicare is a United States federal health insurance program. Medicare supplements health and medical costs for individuals 65+, disabled youth, Social Security Disability Insurance (SSDI) recipients, End-Stage Renal Disease (ESRD) patients, and amyotrophic lateral sclerosis (ALS) sufferers.
Who should get Medigap coverage?
Medigap plans are best for people with Original Medicare desiring to cover gaps in Medicare Part A and Medicare Part B. Original Medicare has no limit on out-of-pocket costs. Medigap protects against gaps in coverage. It is essential to choose a Medigap plan with benefits that best fill in coverage gaps.
What does Medigap cover?
All Medigap plans cover:
- Medicare Part A coinsurance payments
- Medicare Part B copayment or coinsurance
- The first three pints of blood used in a medical procedure
- Part A hospice care coinsurance expense or copayment
Some Medigap plans cover:
- Skilled nursing facility care coinsurance
- Medicare Part A deductible
- Medicare Part B deductible
- Medicare Part B excess charge
- Foreign travel exchange
Benefits of Medigap
- Medigap plans offer the same benefits regardless of the insurance company.
- Medigap can cover the costs of care the Original Medicare does not.
- Potential out-of-pocket costs for medical care are limited.
- Medigap policies are affordable and can help reduce your out-of-pocket costs.
- Medigap does not have provider networks, so you can see any doctor or healthcare provider who accepts Medicare.
- Prescription drug coverage is not included in most Medigap plans. A prescription drug plan may be purchased, separately.
- Medigap plans work in any U.S. state or U.S. territory.
- Referrals are not required. Individuals may see any specialist without a referral from a primary care doctor.
- Emergency medical care is often covered when traveling outside of the United States.
Medigap Disadvantages
- Medigap plans often have higher premiums than Medicare Advantage (Medicare Part C) plans.
- Medigap does not cover dental or optical care.
- Outside of the initial enrollment period, the insurance company can require a person to qualify medically if they wish to purchase a Medicare supplement plan.
- A separate Prescription Drug Plan must be purchased to get prescription drug coverage with a Medigap policy.
Tips before buying a Medigap policy
- Make sure you are eligible.
- Learn when you have the right to buy a Medigap policy without restriction.
- Compare different Medigap policies.
- Learn how a Medigap covers prior medical conditions.
- Find out how premiums are priced.
Additional information
Standard Medigap plans are labeled A through N and offer different levels of health coverage. Plans C, E, F, H, I, and J are no longer available to new subscribers. As of January 1, 2020, Medigap plans sold to subscribers new to Medicare can no longer cover the Part B deductible. If a person was eligible for Medicare before January 1, 2020, but not enrolled, they may be able to purchase Plan C or F.
Final Word
Medicare is a great program that helps countless individuals every day. Medigap coverage is a way to add a layer of protection in addition to Medicare coverage. It is essential to review Medicare coverage and identify areas that may lack coverage. Always speak to a professional for a clear understanding of Medicare, Medigap, and benefits. Medigap may be the protection needed to avoid outrageous medical costs for you or a loved one.
References
https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare
https://www.medicare.gov/sign-upchange-plans/types-of-medicare-health-plans/medicare-advantage-plans
Differences Between Medicare Advantage and Medigap | MedigapSeminars
Medicare: What Are Medigap Plans? (webmd.com)